In Reversal, U.S. Nears Deal On Drugs for Poor Countries

By ELIZABETH BECKER

Published: August 28, 2003

WASHINGTON, Aug. 27—
The United States said today that it was close to accepting an agreement, which it had rejected last December, to help poor nations buy generic medicines through exemptions from trade rules.

The reversal by Washington -- meant to improve the access of millions of people in those countries to expensive patented medicines for AIDS and other diseases -- could enhance the Bush administration's international standing and prevent the collapse of global trade talks to be held in Mexico next month.

After weeks of intensive negotiations, the United States won assurances that countries would not take advantage of the arrangement to increase exports of generic drugs to nations that are not poor and do not have a medical emergency, diplomats involved in the discussions said.

They said an agreement could come as soon as Thursday.

These global public health decisions are being made by the World Trade Organization because it protects intellectual property rights, including the patents held by pharmaceutical companies.

For years, poor countries have used moral and political arguments, saying concerns about patent protection paled in comparison with the needs of millions of poor people for advanced medicines that could save their lives.

Peter Allgeier, the deputy United States trade representative, said today in a telephone conference call from Geneva that he hoped to reach an agreement before the formal meeting of the World Trade Organization began in Cancún, Mexico.

''It is possible,'' Mr. Allgeier said. ''We are still working very intensively on that.''

Mr. Allgeier refused to discuss details. ''It is so sensitive,'' he added.

But Faizel Ismail, the permanent representative of South Africa to the World Trade Organization, who was part of the private negotiations, said the United States accepted the deal because of new assurances that it would not be abused by the countries in need of generic drugs to fight diseases like AIDS, malaria and tuberculosis.

''We were willing to reach out to the American pharmaceutical industry and find a way of including them in the consensus without sacrificing the substance of the agreement,'' Mr. Ismail said in a telephone interview from Geneva.

Developing nations had pinned their hopes on such an agreement. The European Union and Switzerland, the other big producers of medicines, signed off on a deal last December to allow poor nations to buy generic medicines to fight these diseases.

But the United States, with the strong approval of the American pharmaceutical industry, blocked the deal by exercising the veto that every member nation possesses at the World Trade Organization.

That move upended the timetable for the current round of trade negotiations that is dedicated to helping developing nations, and put the United States in the embarrassing position of being the lone nation opposing a solution to make vital drugs affordable for the poorest people on earth.

Poor countries already have the right to manufacture copycat versions of brand-name medicines in the event of a health emergency by issuing what is called a compulsory license. But the poorest nations have no factories to produce such medicine. The pending trade agreement solves that problem by allowing these countries to import the generic drugs from developing nations like Brazil or India under the compulsory license.

Jeff Trewhitt, a spokesman for the Pharmaceutical Research and Manufacturers of America, the industry group for research-based American pharmaceutical companies, said there would be no comment until a final deal was reached. But officials who have met with American pharmaceutical executives said that the companies would not lobby against the agreement.

Ambassador Robert B. Zoellick, the United States trade representative, was credited today by several officials with persuading the American pharmaceutical industry, as well as the White House, that a compromise had to be reached before the trade talks start on Sept. 10.

In the last few days, the United States struck an accord with a crucial group of developing countries -- including Brazil and India, which are large producers of generic drugs, and South Africa and Kenya -- raising the odds for a full agreement by the 146 members of the trade organization.

In exchange for these new assurances sought by the pharmaceutical industry, the United States dropped its demand that the agreement cover only a few diseases and that it limit the number of countries eligible to import the generic drugs, several diplomats said.

Instead, the United States has successfully lobbied more than 20 developed nations to agree to voluntarily opt out of using this agreement to import generic medicines, several officials said.

''This is better than what the United States originally wanted and doesn't limit the scope of diseases,'' said Nelson Ndirangu, a member of the Kenya delegation to the World Trade Organization.

But several nongovernmental organizations said the compromise did not go far enough to ensure that generic versions of medicine could be produced and exported wherever they were needed.

''We are saying that promoting public health and pursuing commercial objectives are not contradictory, and that we need a highly competitive market to keep prices down,'' said Ellen 't Hoen, director of the campaign for access to essential medicines for Doctors Without Borders, in a telephone interview from Paris.

The compromise was offered today at a committee meeting in Geneva and was greeted, officials said, with nearly unanimous approval.

Several ambassadors said they would consult with their governments before the Thursday meetings. Representatives from the Philippines and Argentina offered objections that officials said they hoped could be answered by the time the issue was brought before the trade organization on Thursday.

Photo: David Huezo, left, president of the American Chambers of Commerce in El Salvador, talked with Peter Allgeier, the deputy United States trade representative, at a meeting last month in San Salvador . (Photo by Associated Press)(pg. C6)